Court confirms OSS enforceability of dual-licensing

A recent federal district court decision denied a motion to dismiss a complaint brought by Artifex Software Inc. (“Artifex”) for breach of contract and copyright infringement claims against Defendant Hancom, Inc. based on breach of an open source software license. The software, referred to as Ghostscript, was dual-licensed under the GPL license and a commercial license. According to the Plaintiff, those seeking to commercially distribute Ghostscript could obtain a commercial license to use, modify, copy, and/or distribute Ghostscript for a fee. Otherwise, the software was available without a fee under the GNU GPL, which required users to comply with certain open-source licensing requirements.

Hancom responded to these allegations with three arguments. First, it alleged Plaintiff failed to state a claim for breach of contract and that any such claim is preempted by copyright law. Second, it alleged Plaintiff’s copyright claim must be dismissed in part because Plaintiff has failed to allege that Defendant committed a predicate act in the United States. Finally, Defendant moved to strike portions of the relief sought in the complaint.

The Court rejected all three arguments. On the first issue, the court stated: “Defendant contends that Plaintiff’s reliance on the unsigned GNU GPL fails to plausibly demonstrate mutual assent, that is, the existence of a contract. Not so. The GNU GPL, which is attached to the complaint, provides that the Ghostscript user agrees to its terms if the user does not obtain a commercial license.” The Court added: “Plaintiff’s allegations of harm are also adequately pled. Plaintiff plausibly alleges that Defendant’s use of Ghostscript without obtaining a commercial license or complying with GNU GPL deprived Plaintiff of the licensing fee, or alternatively, the ability to advance and develop Ghostscript through open-source sharing. Indeed, as the Federal Circuit has recognized, there is harm which flows from a party’s failure to comply with open source licensing: “[t]he lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration” because “[t]here are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties.”

The dismiss was rejected, but still has not ended

As to Plaintiff’s prayer for relief, including Plaintiff’s request for specific performance, restitution, and consequential damages on the breach of contract claim, and statutory and exemplary damages, as well as attorney’s fees on the copyright claim, Plaintiff conceded that as pled it is not entitled to exemplary damages on either claim, but otherwise contends that Defendant’s request to dismiss and parse portions of its prayer for relief is otherwise improper at this stage. The Court agreed.

Besides that it feels right from a common sense point of view, I like real cases get a ruling. It should clarify what practical meaning have the OSS licences.